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earnings response coefficient

The relationship between a firm's equity returns and any unexpected earnings announcements. A firm's stock price is related to information available to investors. Thus, news of unexpected earnings can lead to buying panic while low earnings can lead to selling panic. The earnings response coefficient is expressed as R = a + b(em-u) + e where r is the expected return, (em-u) is the value of unexpected earnings, e is the random movement, a is the benchmark rate and b is the earnings response coefficient.

Related information about earnings response coefficient:
  1. Earnings response coefficient - Wikipedia, the free encyclopedia
    In financial economics, the earnings response coefficient, or ERC, is the estimated relationship between equity returns and the unexpected portion of (i.e., new ...
     
  2. What is earnings response coefficient? definition and meaning
    Definition of earnings response coefficient: The relationship between a firm's equity returns and any unexpected earnings announcements. A firm's stock price is ...
     
  3. Earnings Response Coefficient financial definition of Earnings ...
    A measure of relation of stock returns to earnings surprises around the time of corporate earnings announcements. Earnings Response Coefficient ...
     
  4. Estimating the earnings response coefficient (ERC)
    The earnings response coefficient (ERC) is the stock market reaction (the change in stock price) for one unit of unexpected earnings. This can be measured ...
     
  5. Accounting earnings response coefficient: An extension to banking ...
    Sep 9, 2011 ... This paper reports new finding on earnings response coefficients for banking firms on how disclosures on total earnings and disaggregated fee ...
     
  6. Earnings Response Coefficient
    Apr 26, 2012 ... The earning response coefficient refers to the anticipated relationship between the returns of the equity and the unexpected earnings ...
     
  7. Earnings response coefficient Definition - NASDAQ.com
    Earnings response coefficient: read the definition of Earnings response coefficient and 8000+ other financial and investing terms in the NASDAQ.com Financial ...
     
  8. Earnings Response Coefficient Models: Synthesis and Extensions ...
    May 19, 2006 ... We provide a rigorous and comprehensive set of derivations of earnings response coefficient models in levels and changes forms. Reverse ...